When in Rerum Novarum Pope Leo XIII taught that it was the ‘great and principal duty’ of every employer to give every one of his work-people a fair wage, he was, as he himself reminded the faithful, only enunciating a principle that had its foundation in natural justice. When he again, and Pope Pius XI after him, declared that a workman’s wages must be sufficient to enable him to maintain himself, his wife, and his children in reasonable comfort, and to put by for a rainy day, they were making a declaration not only of Christian, but also of natural, rights.

Nearly thirty years after Rerum Novarum the Anglican Lambeth Conference recognised that a living wage should be the first charge upon industry. That was in 1920, when many industries were finding it difficult to keep alive, and others were already expiring, when many workers, far from being paid a living wage, were soon to become wageless, while the prospect of permanent employment for many others was rapidly diminishing.

During the war of 1914-1918 there had been phenomenal prosperity. The living wage seemed to have become a recognised right, and rates of pay were constantly raised to meet rising prices. But the high wages were in great part the result of a large and easy flow of money. Whereas the deposits of twenty-two British banks in 1914 amounted to £875,000,000, in 1919 they had reached the sum of £2,117,000,000. This huge increase was caused very largely by the wholesale purchase of War Loan by the banks themselves, and by their lending money, which soon came back to them as deposits, for the purchase of War Bonds.